Scotland: Build to Rent, mid-market exempt from caps

From 1 April 2026, two types of homes will sit outside Scotland’s new rent caps: Build to Rent developments and mid‑market rent properties. Ministers have made The Private Housing Rent Control (Exempt Property) (Scotland) Regulations 2026 to switch these exemptions on within the long‑term rent control system created by the Housing (Scotland) Act 2025. If you rent, teach housing, or manage a scheme, this is your quick guide. (gov.scot)

First, the big picture. Rent control areas will be designated where evidence supports intervention. In those areas, rent rises are limited to Consumer Prices Index (CPI) plus 1 percentage point, up to a ceiling of 6%, and that applies within and between tenancies. Exempt homes do not follow those local caps; instead they default to the general private residential tenancy rules that limit rent changes to once in any 12‑month period with proper notice. (gov.scot)

Build to Rent (BTR) is about purpose‑built homes for renting at scale. To qualify for exemption, a property must be built, converted or renovated for residential use, form part of a ‘relevant development’ of six or more homes under one planning permission and common ownership, have a completion date on or after 31 August 2021, and appear on the landlord register. The exemption ends if it becomes owner‑occupied, is used as a short‑term let, is removed from the landlord register, or no longer forms part of that development. (sfha.co.uk)

A couple of definitions help here. The ‘completion date’ in practice is when a local authority accepts a completion certificate under section 18 of the Building (Scotland) Act 2003 or, if earlier, when it grants temporary occupation permission under section 21(3). A ‘short‑term let’ has the meaning used in Scotland’s licensing scheme made under the Civic Government (Scotland) Act 1982. These are the reference points regulators, landlords and tenants will use when checking BTR status. (legislation.gov.uk)

Mid‑market rent (MMR) properties also qualify for exemption, but only where rent increases are already restricted by funding conditions or by the terms of the tenancy, those restrictions cap rent at a specified level, and the landlord does not increase above that level. The specified level is the median market rent for that property size in the relevant Broad Rental Market Area (BRMA), or the median for a similar size if no data exist. (sfha.co.uk)

What is a BRMA? Think of it as an area where a person could reasonably live with access to everyday services; rent officers use BRMAs to group local markets when they compile rental evidence. Using the BRMA median keeps exempt MMR homes anchored near the middle of local market prices rather than at the top end. (gov.scot)

There’s no double‑counting. A home treated as mid‑market rent for this exemption is not treated as Build to Rent under the same rules. The policy aim is to keep the carve‑outs narrow: one is for purpose‑built private rental investment; the other is for homes with existing affordability controls. (dentons.com)

How will you know a property is genuinely exempt? The 2025 Act lets Ministers set a confirmation process (for example, approval by a specified body or inclusion on a register). In rent control areas, adverts for exempt homes must clearly state that status and include the confirmation details or registration number. Landlords and agents should update listings and keep records to evidence exemption. (legislation.gov.uk)

Key dates matter for lessons and planning. The exemption criteria for BTR use 31 August 2021 as the cut‑off for ‘completion date’ because that’s when Ministers announced their intention to introduce rent control. The draft regulations were laid before Parliament on 29 January 2026, scrutinised by committee in early March, and take effect on 1 April 2026 following approval. (sfha.co.uk)

Where does this leave tenants and landlords day‑to‑day? If you live in an exempt BTR or MMR home inside a rent control area, the local cap won’t set your rent. But you still have the general private residential tenancy protections, including the rule that rent can only be increased once in any 12‑month period and the right to refer a proposed increase to a rent officer. (legislation.gov.uk)

We should also recognise the debate. Tenant groups argued against exemptions during consultation, warning about affordability risks; investor and social‑landlord voices supported exemptions to avoid deterring new supply, especially where MMR already carries affordability checks. When you teach or study this topic, compare those positions with the final tests set in law. (sfha.co.uk)